It's as if Naomi Klein wrote the script......(
Bloomberg) The International Monetary Fund may create a six-month credit line for countries facing shocks, officials from Group of 20 governments and IMF said, as the European debt crisis rocks global financial markets.
The amount would be capped at five times a nation’s contribution to the Washington-based IMF, known as a quota, making the credit line best suited for smaller countries, the people said. It is likely to be endorsed at a meeting of G-20 leaders this week in Cannes, France, where European nations will seek financial support from other members, said the three officials, who declined to be identified because the plan hasn’t been made public.
The instrument would be the latest in a set of IMF tools intended to increase liquidity as Europe’s crisis threatens to spread beyond Greece. It could be used as part of a broader international package to aid larger economies such as Spain, with IMF participation serving to reassure other creditors, said Bessma Momani, a political science professor at the University of Waterloo in Canada.
“The worry of most of these creditor countries is, ‘Who’s watching?’ said Momami, who specializes in the IMF and its policies. “This is in a sense a demand of creditor countries -- - Russia, China, the Gulf countries -- that before going to the G-20 there is some sort of confidence-building measure that the IMF will not let this go.” She said the line could also be used by smaller countries such as Egypt or Tunisia to meet short-term cash needs. ............(more)
The complete piece is at:
http://www.bloomberg.com/news/2011-11-01/imf-may-create-6-month-credit-line-for-countries-facing-shocks.html